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AFDC Benefits and Nonmarital Births to Young Women

  • Saul D. Hoffman
  • E. Michael Foster

Building on recent work by Rosenzweig (1999), this paper re-examines the effect of AFDC benefits on early nonmarital childbearing. Unlike most previous work in this area, Rosenzweig finds a statistically significant and quantitatively large positive effect of AFDC benefits. Using data from the Panel Study of Income Dynamics, we replicate Rosenzweig=s analysis and explore the reasons his findings differ from earlier research findings. We are able to reproduce his main finding that AFDC generosity influences non-marital childbearing when state and cohort fixed-effects are included. However, we find that model specification matters a great deal. An alternative specification of state fixed-effects yields no evidence of an AFDC effect, and when we focus on fertility only through age 19 (as in prior work), we also find no AFDC effect. This latter finding implies that the behavior of women in their early 20s may be far more sensitive to welfare generosity than is that of teenagers.

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Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 3.

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Date of creation: 01 May 1997
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Handle: RePEc:wop:jopovw:3
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  1. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 251-299.
  2. Greg Duncan & Saul Hoffman, 1990. "Welfare benefits, economic opportunities, and out-of-wedlock births among black teenage girls," Demography, Springer, vol. 27(4), pages 519-535, November.
  3. Lundberg, Shelly & Plotnick, Robert D, 1995. "Adolescent Premarital Childbearing: Do Economic Incentives Matter?," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 177-200, April.
  4. O'Connell, Philip J. & Russell, Helen & FitzGerald, John, 2006. "Human Resources," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).
  5. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  6. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
  7. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
  8. Williamson Hoyne, Hilary, 1997. "Does welfare play any role in female headship decisions?," Journal of Public Economics, Elsevier, vol. 65(2), pages 89-117, August.
  9. Geronimus, Arline T & Korenman, Sanders, 1992. "The Socioeconomic Consequences of Teen Childbearing Reconsidered," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1187-214, November.
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